Why is it so hard

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Why is it so hard

Eric Smith
Investors · Groton, CT · Member since 2014 · 10 posts · 2 votes

Why is it so hard to find funding when you have bad credit.  We are trying so hard to accomplish our goals in becoming great Investors.  What is it we need to do to get off our feet.  We are finding as much as some people are saying they don't go buy your credit they do.  Please help us figure out what we can do to start flipping houses.  We do not expect to become rich overnight, we know that this type of business does not allow that.  Please advise.

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George Smith
Investor · Latham, NY · Member since 2014 · 217 posts · 65 votes
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Not saying it can't happen but starting out with not enough cash and bad credit is a possible but very steep climb. How long have you networking with other individuals? If you haven't already I would start attending as many local REI meetings as possible. From there, you have to build relationships and possibly not make much on your first deal to earn the trust of others as well as learn the ropes. If you can break even on your first deal, consider it a paid education.
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  • George Smith
    Investor · Latham, NY · Member since 2014 · 217 posts · 65 votes
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    Not saying it can't happen but starting out with not enough cash and bad credit is a possible but very steep climb. How long have you networking with other individuals? If you haven't already I would start attending as many local REI meetings as possible. From there, you have to build relationships and possibly not make much on your first deal to earn the trust of others as well as learn the ropes. If you can break even on your first deal, consider it a paid education.
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  • Chris SeveneyBusiness Member
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    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
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    Why is your credit bad?
    7e investments53 Reviews
    WebsiteView Page
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  • Ryan Mullin
    Real Estate Broker · Indianapolis, IN · Member since 2009 · 575 posts · 496 votes
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    Seek out investors or sellers that will do seller financing.  Manage the properties your self, work on paying them off or refinancing.  

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  • Darrell Shepherd
    Rehabber · Smyrna, GA · Member since 2013 · 864 posts · 510 votes
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    Why is it so hard to find funding when you have bad credit?  Not to be rude but that's just funny.  "credit" is how well you've paid back previous lenders, if you have a lousy track record of paying people back, new lenders aren't going to be all that excited to hand you their money.

    There are lenders out there that will do hard money loans with no credit pull if your deal is right, LendingHome will do a background check, but wont do credit score if you borrow in and LLC and personally sign as a guarantor. They aren't going to do 100% on your first deal, though. Depending on the deal, they are usually around 90% of the total project. I don't know if they are in CT yet.

    I'm a firm believer in that if the deal is right the money is always there.  My advice is to find a stellar deal and find a guy like me to partner with.  I do deals where I bring all the money and split the proceeds fairly regularly.  Buying one tomorrow in Charlotte like that, actually.  Like has been said, start networking with people doing deals.  LEARN.  Like George said, rehabbing a house with no money, no credit, no experience is HIGHLY unlikely.  This is real estate investing, not real estate working.  You kinda need something to invest.  Doesn't have to be your money, of course, I do all my deals at 100% funding, but I've got the relationships and experience to pull that off.  

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  • Joe Bertolino
    Investor · El Dorado Hills, CA · Member since 2012 · 1k+ posts · 1k+ votes
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    The only people saying credit doesn't matter are the guru's trying to sell you a weekend seminar for $2k. Why would a lender bet on somebody with no cash, credit or experience? The good news is that it usually isn't that hard to repair credit.
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  • Michael Noto
    Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
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    You say your credit is bad. How are you looking in terms of down payment money or money in general to put towards a project?

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  • Nicole Pettis
    Flipper/Rehabber · St. Louis, MO · Member since 2008 · 489 posts · 300 votes
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    @Eric Smith Since you know your credit's bad, the first step is to fix it. Why is it bad? Is it because of delinquent payments? Over leveraged? Whatever the reason is, figure out the steps to take to get it in a good place. 

    Are you budgeting every month? I HIGHLY recommend Dave Ramsey's book the Total Money Makeover. It will help tremendously in this arena. 

    There are many false prophecies when it comes to REI, one of them is "you don't need cash" and that's just not true. You have to have some sort of emergency fund or savings to start, having none is not an option. Having a good credit score is another if you have to borrow money. There's no other way around it.

    If you really want to invest in real estate, I recommend getting your credit in order and putting away some money. Doing those two things will help down the road. 

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